NEW YORK, NY — A new era of work has companies and governments seeing unprecedented levels of productivity, but also a massive phase-out of jobs rendered obsolete by technology. And a new study shows some metro areas are better positioned than others to grow in the future as the workforce continues to evolve.
These places have one of two characteristics. Some are chock-full of challenging, hard-to-replace industries often tied to things like bigger paychecks and population growth. Others are growing through less-attractive industries in terms of things like high-quality jobs or their ability to attract the more sophisticated ones.
The Brookings Institution, a Washington, D.C.-based think tank, published its report in May with an accompanying interactive map showing how economically complex a city’s industries and underlying jobs are. Cities with more complexity are, by any measure, “more successful,” the authors wrote.
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The report is filled with jargon and mathematical concepts that can give you whiplash. But the concept is actually quite simple: Cities want as high a score as possible for economic complexity. This means it has a healthy number of industries and jobs that aren’t easily replaced or automated, such as computer systems design and scientific research. City scores for economic complexity range from as low as about -2.1 all the way up to around 3.5, though most appear to fall between -0.5 and 0.5.
The strategic index score is a little more interesting when it comes to policy-making, Marcela Escobari, a senior fellow at Brookings, told Patch this week. It indicates what industries are small and nascent in a city and that have a lot of potential. A high strategic score means the city is full of what they call “nearby” industries that have capabilities used by those in other more attractive industries.
“They’re attractive because they use talent, infrastructure, other things that can be used by complex industries,” said Escobari.
For example, Rhode Island officials decided that rather than relying on tax incentives to attract a certain biotech company, the two worked together to build the right workforce. After the company set foot in the state and started investing, several more biotech companies began knocking on the door, hoping to locate there and take advantage of the workforce talent.
“When we talk about a capability-based approach to growth, it’s understanding which sort of industries use the same talent and other capabilities as those you currently have,” she said. “We can tell you which industries are ‘nearby’ using our network approach. We can say that for every city, if you have a high strategic index, that means that you have a high potential to diversify into other complex industries, since the capabilities you have are shared by other complex industries.”
The strategic index score ranges from -2 to about 3.8, though most cities hover between -1 and 1. The ideal position is to have high scores in both categories, such as Nashville. These have a sunny economic outlook and are “primed” for job growth. Other areas, such as Pecos, Texas, face some tough sledding. Indeed, the authors prescribed a “thoughtful intervention” for cities with two low scores.
“For them, concerted effort towards strategic industries is paramount,” the report said.
Many cities scored well in one category but not the other. This is true in major metro areas, including Washington, D.C., New York and Los Angeles, which have high economic complexity scores and low strategic scores. This makes sense, Escobari said, because these cities are already strong in nearly all complex industries, meaning growth would have to come from new industries.
“It’s not a bad thing that it’s lower because they’re already in there,” said Escobari. “New York is going to grow by strengthening the current sophisticated industries and maybe inventing the next industry that we’ve never heard about.”
Meanwhile, cities with a low complexity score but a high strategic score will likely need to focus on less-complex work in nearby industries. This would hopefully gradually build an environment for more advanced capabilities. Such would be the case in a place like South Bend.
The report aimed to give local readers some insight on how the changing economy is “reshaping communities’ distinct advantages and opportunities.”
“Because this plays out differently depending on the unique mix of industries in each city — and the implicit capabilities they depend on — each community needs to chart its own tailored strategies toward growth,” the authors wrote.
The map also showed a stark contrast between the most and least developed metro areas. Sometimes, the best positioned areas neighbored the worst. Such was the case with Boise City and Ontario in Idaho. The Boise City area boasted scores of .6 and .8, respectively, while the Ontario area lagged behind with negative scores in both categories: -.6 for complexity and -.2 on the strategic index.
Furthermore, young workers ought to prepare to have “many careers.” Work will increasingly be organized around short-term assignments instead of “traditional” jobs. To that end, longstanding systems and institutions — such as colleges — long associated with growth and success have struggled to adapt to the changing economy. They, too, must rethink how best to prepare people.
Escobari said the researchers used a similar methodology to one Harvard University researchers previously used to evaluate countries. As cities think about how best to approach the future of work, the Brookings analysis acts as a sort of data-driven map they can use to navigate the future, allowing them to understand which industries are at risk and which are likely to grow based on where they currently stand.
“Instead of telling everyone, ‘to grow, just invest in these five tech industries, or just build talent and good infrastructure,’ a city can work form where it stands. The fact that certain industries exist in a city means it already has certain capabilities,” said Escobari.